Are short sellers “ogling” KiOR?

In Texas, reports are surfacing that KiOR is short on capital to execute its business plan. “One clean energy stock that short sellers are ogling is KiOR,” writes CNBC.

“The company currently has $150 million in cash and the well could run dry by the end of this year unless KiOr can raise a lot more money. It needs upwards of $100 million more just to get its two plants going and to reach profitability, and that assumes no glitches.”

At the same time, only last month Raymond James upgraded KiOR’s shares to Outperform. “On September 19, we downgraded the stock from Outperform to Market Perform after it had gained 28% post-IPO. Our downgrade was based on valuation, and we have remained positive on KiOR’s underlying fundamentals. Since then, the stock has given back all of these gains and more, falling by 44%, which includes the recent weakness heading towards this week’s end of the post-IPO lockup period. With the shares well below our DCF estimate of $14.30, we believe the risk/reward profile has again become attractive.”